57 slides from First Bancorp. New's investor presentation, Jul 9, 2007
Slide 1: First Bancorp (NYSE: FBP) Overview July 2007
First Bancorp (NYSE: FBP) Overview July 2007
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by First BanCorp to provide current information, including preliminary financial information, about its operations and includes information that has not been included in any report previously filed with the Securities and Exchange Commission. The financ
Slide 3: Management Presenters
Management Presenters +b. Beauchamp joined Fist Bon Cam in 1990 ana wate nemed Presclant andl CEO end toord Mamboer in September 2005, 1 ior to this position, Mr. Bectuchamp served as Chief Lencling Orficer ‘nel SEVP of the Wholesale Banking alviton this rola, he rranaged commercial, conskuotion and
Slide 4: Management Presenters
Management Presenters Randotfo Rivera + As Breoutive Vice Presicent, Vr Riveraisin charge of corporate EVP.Wh 8 enking, commercial, ntemationdl, government cndinshiviion! keenking, stuctured finance and och management for Frstbark Puerto Rico 1 Por fo joiring FistBork Puerto Ricoin 1998, Mr. Rivera
Slide 5: Management Presenters
Management Presenters Naya Ri svP.c Todo esté en uno 4 deine! FrtBank in 2002 ‘© Appointedl Chief Risk Officarin Ap 2008. Per to appointment weis (Generel Aucitor from July 2002 10 Api 2006 Price to joining Frstbank weis Audit Manager at Prioawatathcuze Coopers LLP fremn September 1996 to July 2002
Slide 6: Company Overview
Timeancor Company Overview
Slide 7: Corporate Organizational Chart
Corporate Organizational Chart Notes: IBE: International Banking Entity Organizational chart shows the Corporation's main business entities First BanCorp FirstBank Puerto Rico First Express USVI FirstBank Insurance Agency First Insurance Agency USVI First Federal Finance (d/b/a Money Express) First
Slide 8: First BanCorp Developments Since September 2005
First BanCorp Developments Since September 2005
Slide 9: First BanCorp Recent Developments
First BanCorp Recent Developments September 2005: Senior Management changes November 2005: Board of Directors elected Fernando Rodriguez Amaro as a new independent director to serve as an additional financial expert on the Audit Committee December 2005: First BanCorp announced that it would restate
Slide 10: First BanCorp Recent Developments
First BanCorp Recent Developments August 2006: FirstBank consented to a Cease-and-Desist order with the FDIC under which the Company agreed to take certain actions to strengthen the Bank's compliance with the Bank Secrecy Act ("BSA") August 2006: FirstBank acquired an office building and land for a
Slide 11: First BanCorp Recent Developments
First BanCorp Recent Developments December 2006: The Corporation was engaged in conversations with the SEC for the possible settlement of its investigation. The Corporation has accrued $8.5 million in its 2005 financials. 2006: The Corporation received several FDIC approvals for intercompany dividen
Slide 12: First BanCorp Recent Developments
First BanCorp Recent Developments February 2007: First BanCorp announced that it has entered into a definitive agreement to issue approximately 9.250 million shares of its common stock to Scotiabank through a private placement offering, for a total purchase price of approximately $94.8 million. Afte
Slide 13: Restatement 2004 Form 10K/A and Subsequent Filings
Restatement 2004 Form 10K/A and Subsequent Filings
Slide 14: 2000 - 2004 Restatement: Interest Rate Derivatives
2000 - 2004 Restatement Interest Rate Derivatives The effect of the restatement related to derivatives resulted in a cumulative non- cash decrease in retained earnings of approximately $26.3 million ($15.1 million after deferred tax effects) Other Accounting Adjustments Other accounting policies and
Slide 15: 2000 - 2004 Restatement: Net Income
2000 - 2004 Restatement Net Income Net Income Net Income Net Income Net Income $ In Thousands $ In Thousands $ In Thousands $ In Thousands $ In Thousands As Previously Reported As Restated $ Change % Change 2004 $178,878 $177,325 -$1,553 -0.87% 2003 $152,338 $119,894 -$32,444 -21.30% 2002 $107,956 $
Slide 16: 2000 - 2004 Restatement
For Fiscal Year 2004, net adjustments decreased previously reported net income by approximately - $1.55 Million Cumulative adjustments decreased retained earnings and legal surplus by $17.1 Million Approximately $15.1 Million represents non-cash derivatives adjustment Restatement reflects changes in
Slide 17: Subsequent Period Filings
Subsequent Period Filings On February 9, 2007 the Corporation filed its Annual Report on Form 10-K for the year ended December 31, 2005 with the Securities and Exchange Commission. The Corporation filed its Annual Report on Form 10-K for the year ended December 31, 2006 with the Securities and Excha
Slide 18: Business Overview & Highlights
Business Overview & Highlights
Slide 19: Business Overview
Business Overview First BanCorp is the parent company of FirstBank Puerto Rico, a state chartered commercial bank with operations in Puerto Rico, the Virgin Islands and Florida; FirstBank Insurance Agency; and Ponce General, the holding company of FirstBank Florida FirstBank Puerto Rico has 4 subsid
Slide 20: Geographic Footprint
(48) 2 15 Geographic Footprint (4)
Slide 21: Puerto Rico Footprint
Puerto Rico Footprint Opportunities Within the Local Market Opportunities Within the Local Market Opportunities Within the Local Market Dark Green: Municipalities where FBP is present
Slide 22: Second largest financial holding company headquartered in Puerto Rico
FBP: Second largest financial holding company headquartered in Puerto Rico Share (Dec 06) Market Position Branches* 8.36% 4th Deposits Savings & CD's (w/o brokered, foreign, IRA & keogh) 8.81% 4th Consumer DDA's 7.35% 6th Commercial & Corporate DDA's 5.73% 5th Brokered CD's 31.70% 1st Government Dep
Slide 23: Business Highlights
Business Highlights Diverse Business Mix Core lending franchise is comprised of corporate, commercial and consumer lending Full service and scale corporate and commercial and construction banking operations differentiate First BanCorp from most Island peers Additional scale businesses, including mor
Slide 24: Business Highlights: Strengthened Risk Management Culture
Business Highlights Strengthened Risk Management Culture First BanCorp developed and invested in a state-of-the-art risk management system that allows the Bank to maintain a competitive advantage in the marketplace Vigorous interest rate risk management with ALCO Committee Enhanced credit quality ov
Slide 25: New branding initiative and One-Stop Shop
New branding initiative launched in 4th QTR 2005, where the Bank ties in all its product offerings and branch network through its One-Stop Shop initiative The Bank continues to grow organically by developing cross-selling strategies with its existing client base, with an objective of reaching 5 prod
Slide 26: Branding Strategy: The Tagline and Signature
Branding Strategy: The Tagline and Signature
Slide 27: First BanCorp Total Assets
130 First BanCorp Total Assets First BanCorp Total Assets of $17.2 Billion as of March 31, 2007 Cash & Money Market Instruments Other assets 4% 3% Investments 29% Loans Receivable net of ALL of $161 million, 64%
Slide 28: Transformation to a Diversified Loan Portfolio
First BanCorp's Transformation to a Diversified Loan Portfolio
Slide 29: Transformation to a Diversified Loan Portfolio
First BanCorp's Transformation to a Diversified Loan Portfolio
Slide 30: Wholesale Banking
Wholesale Banking First BanCorp has developed a broad product offering for its larger corporate customer base Institutions, government agencies and corporations Cash management product launched in 1998 Automated web-based system #3 share of government deposit segment Products include financing, capi
Slide 31: Corporate and Commercial Lending
Corporate and Commercial Lending Commercial Banking at both the Corporate and Middle Market levels is expected to continue as one of the Corporation's growth drivers in the near term In 2005, the Corporation initiated a strategy to cater customer needs in the middle market segment Significant opport
Slide 32: Corporate and Commercial Lending
First BanCorp Corporate and Commercial Lending Corporate and Commercial Lending has shown a CAGR of 17.33% since 2003
Slide 33: Commercial Mortgage
First BanCorp Commercial Mortgage Commercial Real Estate Lending has shown a CAGR of 21.47% since 2003 Note: The increase includes the loans acquired as part of FB Florida acquisition in March 2005, FB Florida commercial mortgage loans at 12/31/2006 and 3/31/07 approximated $275 million and $299 mil
Slide 34: Construction Lending
First BanCorp Construction Lending Specializes in the interim construction financing of residential, industrial and commercial projects in Puerto Rico, USVI, BVI and Florida Currently providing financing to more than 40 projects ranging from approximately $2 million to up to $150 million Constructio
Slide 35: FirstBank Miami Agency
FirstBank Miami Agency FirstBank enters the US mainland market with focus on the Florida market by establishing a Loan Agency Office in November 2004 Miami loan production office offering construction and commercial loans throughout Florida Agency managed by experienced, seasoned construction lender
Slide 36: Residential Real Estate Loans
First BanCorp Residential Real Estate Loans Residential Real Estate Lending has shown a CAGR of 37.59% since 2003 Note: The increase includes the loans acquired as part of FB Florida acquisition in March 2005, FB Florida residential mortgages at 12/31/2006 and 3/31/07 approximated $329 million and $
Slide 37: Mortgage Lending (FirstMortgage - PR Production)
Mortgage Lending (FirstMortgage - PR Production) Mortgage closings have shown a CAGR of 32.73% since 2001, strengthened by the launch of First Mortgage in 2003 Puerto Rico's mortgage market has historically been dominated by Doral, R&G and Popular Mortgage, however, recent developments in the mortga
Slide 38: Consumer Lending
First BanCorp Consumer Lending Consumer Lending has shown a CAGR of 15.68% since 2003
Slide 39: Auto Lending Puerto Rico Operations
Auto Lending Puerto Rico Operations A highly competitive and specialized business on the Island Four major participants: Banco Popular, Reliable, FirstBank and BBVA Strong #2 position with 17.8% market share (Puerto Rico) as of Dec 2006 Also offers leasing and rental services through First Truck & C
Slide 40: Consumer Lending Puerto Rico Operations
Consumer Lending Puerto Rico Operations Offers unsecured lending, credit lines and marine financing Currently #3 in market share Puerto Rico (personal loan segment) with a $370 million portfolio, personal and small loans Successful in developing direct and indirect channels Focus on service - 15 min
Slide 41: Money Express
Money Express Specializes in sub-prime unsecured personal lending Loans below $5,000, under Money Express Brand Loans over $5,000 under Prestamas Brand Puerto Rico market size is largely fixed (approximately $1.2 billion), so focus is on capturing market share from competitors FirstBank currently ha
Slide 42: Insurance Business
Insurance Business FirstBank Insurance and First Insurance VI have experienced tremendous growth since their inception We currently operate insurance agency offices in Puerto Rico and the Virgin Islands Leverage the insurance needs of customers across the Bank's business lines, including auto, mortg
Slide 43: Eastern Caribbean Franchise
Eastern Caribbean Franchise In 1999 and 2002, FirstBank acquired the USVI and BVI branches of Citibank and JPMorgan Chase, respectively FirstBank has become a market leader in these particularly affluent markets In the USVI, #1 share by assets (37%), #1 share by originations (71%) and #2 share by de
Slide 44: FirstBank Florida
FirstBank Florida In March 2005, First BanCorp acquired Ponce General (parent of Unibank, later renamed FirstBank Florida) Continued effort to expand Florida franchise beyond the Bank's Miami-based loan agency Branch network integration through FirstBank Florida branding Anticipated de novo branchin
Slide 45: Selected Financial Data 1st QTR 2007
Selected Financial Data 1st QTR 2007
Slide 46: First BanCorp Total Assets
149 First BanCorp Total Assets First BanCorp Total Assets of $17.2 Billion as of March 31, 2007 Cash & Money Market Instruments Other assets 4% 3% a investments 29% Loans Recehable - net of ALL of $161 million, A%
Slide 47: Asset Quality
Asset Quality Non performing residential mortgage loans have increased during 2006. Historically, the Corporation has experienced minimal losses in this portfolio. Current reserve levels for the mortgage portfolio were reviewed and validated by an external consultant
Slide 48: Asset Quality
Asset Quality Adding back the non-recurrent payment of $2.4 billion from Doral in May 2006 to the denominator of the formula, for comparability purposes, the ratio would have been 1.84% for December 2006.
Slide 49: Asset Quality
153 Asset Quality Allowance to Total Loans 139% 0% 200%. 150% 100% ono. oon. 2002 2002 2004 2008 2008 10.07 Az of Period Ere ‘low ance to Total Loans cluding Resident Loans 236% 250% 2.40% 2.00% 180% 1.00% 050% 000%, 202” 2009” 2004” 2005” 20081007 Az of Period ind
Slide 50: Distribution of Non Performing Loans
Distribution of Non Performing Loans (First BanCorp) Lending & Credit Administration AS OF 03/31/07 % AS OF 12/31/06 % CHANGE FROM FY06 % AS OF 12/31/05 % CHANGE FROM FY05 % RESIDENTIAL MORTGAGE LOANS $ 132,474 50% $ 114,828 46% $ 17,646 15% $ 54,777 21% $ 77,697 142% COMMERCIAL LOANS 28,510 11% 24,
Slide 51: FirstBanCorp Capital Position (estimated)
FirstBanCorp Capital Position (estimated) Note: As filed with the Board of Governors of the Federal Reserve System
Slide 52: FirstBank Capital Position (estimated)
FirstBank Capital Position (estimated) Note: Historically, holding company capital ratios are slightly higher.
Slide 53: Investment Security Portfolio
Investment Security Portfolio (as of March 31, 2007) U.S. Gov. & Agncy P.R. Gov. & Agncy MBS Money Markets FHLB Stock Overnight Deposits Corp. Bonds OTHER 2547817405 57782595 2400300000 288401516 39862000 188412161 6896000 7694851 Total = $5,537,166,528
Slide 54: Funding
Funding (as of March 31, 2007) Cost of Funds YTD 4.84%
Slide 55: U.S. Government & Agency Portfolio by Final Maturity
U.S. Government & Agency Portfolio by Final Maturity1 Date 4/9/2007 5/17/2007 6/28/2007 2/15/2015 5/15/2015 4/8/2019 6/30/2020 10/6/2020 2/17/2022 3/7/2022 7/30/2023 4/26/2024 2/14/2025 6/5/2028 9/8/2028 6/23/2033 Amount 150578479 206589191 98806626 293603389 100144296 506555996 199892365 450000000
Slide 56: Weighted Average Time Left to Final Maturity of Callable & Fixed Brokered CD Portfolio
Weighted Average Time Left to Final Maturity2 of the Callable & Fixed Brokered CD Portfolio Bullets Portfolio WAVG Life Left Callables 12/31/2002 2.54 9.2 12.06 12/31/2003 1.54 10.62 14.21 12/31/2004 1.38 11.91 13.5 12/31/2005 0.3 6.19 11.01 12/31/2006 0.37 6.82 10.32 3/31/2007 0.4 5.99 9.72 2: effe
Slide 57: First Bancorp (NYSE: FBP) Overview July 2007
First Bancorp (NYSE: FBP) Overview July 2007